Industrial houses like the Tatas, the Birlas and Anil Ambani-led Reliance group on Friday got a shot in the arm as Finance Minister Pranab Mukherjee made it easier for private sector entities to enter the banking sector.
“This move will potentially open exciting new avenues of growth for Reliance Capital in the future. We await further details and guidelines,” Reliance Capital CEO Sam Ghosh said on the Finance Minister's proposal on banking licences to private entities and non-banking financial companies.
Delivering his budget speech, Mr. Mukherjee announced that the RBI was considering to give banking licences to some private sector players and NBFCs could also be considered for the same.
Besides Reliance Anil Dhirubhai Ambani Group, many other private sector groups and NBFCs, such as the Aditya Birla Group, Tata group arm Tata Capital, Malvinder Singh-led Religare group and the Muthoot Group, have been eyeing a banking licence and many such entities welcomed the announcement.
Aditya Birla Group Chairman Kumar Mangalam Birla said: “This has come as a pleasant surprise... We would very much want to become a bank.”
At the same time, ICICI Bank CEO and Managing Director Chanda Kochhar said that banking was “a very complex business” and it needed to be seen how the RBI formulates the entire procedure for giving additional licences.